Scale-Up Programmes

FCA Regulatory Sandbox

Located at the Financial Conduct Authority’s London headquarters, the FCA Sandbox provides an environment for firms to test innovative products, services, business models and delivery mechanisms in the real market with real consumers.

The FCA Sandbox provides support to innovative firms regardless of their size or maturity and accepts applications from firms based internationally; however, the business must intend to operate within the UK financial services market.Qualifying firms must be looking to deliver innovation that is either regulated business or supports regulated businesses in the UK financial services market. Their innovation must offer benefits to consumers – either directly or through heightened competition – and be ready to test.The FCA Sandbox’s support to businesses includes the opportunity to test developed technologies, assess commercial viability and pricing strategy and develop their business models in response to the testing. Firms also have access to FCA regulatory expertise.Launched in June 2016 the programme has had three cohorts, involving 60 firms, 70% London based. Most participants have a retail finance background with others in general insurance, pensions and retirement income, retail investments and lending and wholesale. Initially the programme has attracted startups, however the FCA Sandbox has the potential to support scaling up by reducing the time and cost of getting innovative ideas to market (90% in cohort 1 are progressing towards a wide market launch) and helping to attract investment (40% in cohort 1 received investment during or following their test).

Others can learn from how this centralised regulatory and governing body is opening up to innovation and streamlining processes to reduce and remove barriers for scaling companies in financial services. We hope other industry, and public sector, regulatory bodies will learn from this and seek to evolve similar schemes to progress access to markets – so vital to scaling up.